Offering tax incentives for employee health support could give the economy a boost of £2.65 billion in four years, according to the CBI.
The business interest group is urging the government to make employee assistance programmes (EAPs) completely tax-free, which would enable employers to provide workplace mental health support more easily.
Its analysis suggests £10 could be created for the economy for every £1 spent on employee health initiatives, and that it could also increase productivity.
With the next budget announcement due to take place in October, the CBI has highlighted that relaxing tax relief rules for medical treatment recommended by occupational health specialists which are funded by employers could generate £5 for the economy, for every £1 spent on the policy.
Other recommendations from the CBI include the removal of the ‘one per employee, per tax year’ limit on tax-free health screenings and medical check-ups. It believes this would allow companies in industries such as manufacturing, construction and agriculture to “proactively tackle health risks that are greater compared to other industries”.
Employee assistance programmes
The body also wants a new statutory exemption for adult vaccinations and virus and disease testing so that employees are protected from any possible pandemics and new virus strains in the future.
Additionally, the CBI is calling for tax relief to be extended to all employee health and safety eye tests, glasses and contact lenses, regardless of whether these are paid for by employers or employees.
CBI CEO Rain Newton-Smith said: “A healthy economy needs a healthy workforce. We’re seeing vast numbers of people unable to work due to ill health, at a time when firms are crying out for more talent. So, there is an indisputable case for business and government to work together to improve the health of people in work. Firms are keen to play a more proactive role in the health of their employees, but the tax system discourages it.
“Businesses tell us that the most effective measures for employee health interventions are those that are preventative. If health conditions are detected early, they can be treated more easily and at a lower cost, leading to less time off work.”
Highlighting that around 2.8 million people in the UK are out of work due to long-term ill health according to the latest Government estimates, the CBI believes its proposals would help encourage investment in health, tackle labour shortages and accelerate the UK’s growth.
Newton-Smith added: “Taken together, the measures for EAPs and occupational health referrals alone could boost the economy by £2.65 billion over the next four years, putting the UK economy on a more sustainable path to growth. The upcoming Autumn Budget is a crucial opportunity for the Government to act on employee health tax incentives – and the CBI stands ready to work hand-in-hand with politicians to boost the health of our workforce.”
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